Since September 1st, companies in Mexico have to supplement specific invoices with the „Complemento para recepción de Pagos“ when issuing it to the tax authority SAT.
What it is
In Mexico, e-Invoicing is mandatory. The respective invoices CFDI (Comprobante Fiscal Digital por Internet) have to be issued to the SAT in order to be authorized via UUID procedure before completing any transaction. Certain transactions require the additional issuance of the „Complementos para recepcion de Pagos“ which in turn submits further information to the SAT.
The issuance of the Complementos documents is only mandatory if the sale of goods or services is partially or not paid at all. The information required for Complementos are extensive but generally relate to the amount of each paid installment in relation to the original invoice CFDI.
What it does
The Mexican VAT system is based on the cash accounting system. Consequently, companies have to pay VAT on all VAT-relevant sales. In contrast, the e-Invoicing system (which delivers tax-relevant information to SAT) does not differentiate between payments in cash, by credit or in installments. Consequently, the documentation of transaction amounts as well as the amount of installments paid do not match if a company uses installments or deferred payment options (or is simply waiting to get paid by a defaulting customer).
Here, Complementos de Pagos acts as an information gap between the amount of transactions and the executed payments within a certain time span. Thus, the SAT can examine if the information it received are correct which in turn helps making tax fraud transparent.
Which specific information need to be included
- General information of seller and buyer: name, tax ID, tax regime, address, the bank account number of both the issuer and the recipient of the CFDI
- Information about the payment: date, time, amount, form of payment, currency used, exchange rate if paid in foreign currency, check number if used, account numbers from where payment originated, tax ID of target bank
- digital signatures of payment: electronic routing number, digital certificate
- CFDIs related to receipt: UUID number of main CFDIs, serial number and folio, currency used, number of installment, method of payment, original amount due on CFDIs, amount of pending payment
The Complementos can be issued in three ways:
- a Complemento for all payments within a specified time period
- a Complemento per customer, if he has made multiple purchases within a month
- a Complemento for a payment which is covering multiple unpaid or deferred invoices
Which implementation requirements exist
If a Complemento document is generated which addresses multiple payments, the adequate assignment is crucial for the acceptance by SAT. This assignment needs to be carried out according to the following chain of rules:
- assignment according to legal provisions, if such exist
- no legal provisions à assignment according to agreement between buyer and seller
- no agreement à buyer has to inform seller within 5 days of payment of which transaction to payment is linked to
- no buyer information à seller assigns payment to the last outstanding invoice
Which deadlines and penalties persist
The Complementos need to be submitted to the SAT by the 10th day of the month following the transaction.
Penalties range from payments between 13,570.00 and 77,580.00 Pesos and can even lead to the closure of the business.
However, another consequence is more compelling: if the Complementos are not issues to SAT, the buyer cannot deduct the VAT. Companies that due to the non-compliance of their suppliers lose money are likely to find new trading partners. Thus, the economic base of non-compliant businesses will be retracted “organically”.